SThree Plc (STHR), a U.K.-based recruitment company, fell to the lowest in more than a year in London trading on concern that the global economic slowdown will affect earnings.
The shares fell 8.3 pence, or 3.5 percent, to 231.8 pence, the lowest since August 2010. The stock has plunged 47 percent in the past six months as the economic recovery falters.
“The macroeconomic situation deteriorated in the third quarter,” Chief Financial Officer Alex Smith said in a telephone interview. “People are concerned that may affect recruitment companies.”
A selloff of equities during the first four trading days of the month erased $2.5 trillion from global equities on investor concern that the stalled U.S. economic recovery and the sovereign debt crisis in Europe.
Gross profit in the three months ended Aug. 28 rose 18 percent to 50.2 million pounds from a year earlier, SThree said in a statement. Gross profit climbed 23 percent in the previous three months. SThree reiterated an earlier statement about the slowdown in recruitment by investment banks, which pay high fees.
Investment banking jobs accounted for about 12 percent of transactions in the period, compared with 15 percent three months earlier and 17 percent a year earlier.
Richard Bennett, an analyst at Altium Securities Ltd. who rates the shares “buy,” plans to lower his earnings estimate for 2011 “modestly” and for 2012 “significantly” in the wake of today’s statement, he said in a note to clients today.
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